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The Almighty Buck Bitcoin Software

Bitcoin's Nightmare Scenario Has Come To Pass 306

HughPickens.com writes: Ben Popper writes at The Verge that bitcoin's nightmare scenario has come to pass as the bitcoin network reached its capacity, causing transactions around the world to be massively delayed, and in some cases to fail completely. The average time to confirm a transaction has ballooned from 10 minutes to 43 minutes. Users are left confused and shops that once accepted Bitcoin are dropping out. For those who want the Bitcoin system to continue to grow and thrive, this is troubling. Merchants can't rely on digital transactions that can take minutes or hours to validate. A number of prominent voices in the Bitcoin community have been warning over the past year that the system needed to make fundamental changes to its core software code to avoid being overwhelmed by the continued growth of Bitcoin transactions. A schism has developed between the team in charge of the original codebase for Bitcoin, known as Core, and a rival faction pushing its own version of that open source code with a block size increase added in, known as Classic. "Many in the US Bitcoin community had hoped that hitting this crisis point — a network maxed out, transactions faltering — would result in closure, with miners quickly moving to adopt whichever chain proved more valuable to their economic interests," says Popper. "But so far the debate is dragging on without one side claiming a clear victory, leaving tens of thousands of consumer transactions stranded in limbo."
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Bitcoin's Nightmare Scenario Has Come To Pass

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  • This is why I don't rely on fan-currency.

    • Re: (Score:2, Redundant)

      This is why I don't rely on fan-currency.

      As opposed to paper currencies which hold value precisely as long as people believe that they do (i.e. a fan currency).

    • This is why I don't rely on fan-currency.

      So, the U.S. dollar is not fan-currency because it is backed by the full might of the U.S. military?

      • It's not about force, it's about trust. I'll take your dollars in exchange for work or goods because I trust that someone else will accept my dollars in the future.
        • It's not about force, it's about trust. I'll take your dollars in exchange for work or goods because I trust that someone else will accept my dollars in the future.

          Do you ever look deeper and ask why you have that trust?

          • Sure. I have trust because everybody else has it, and it makes no sense for me to be first to abandon my trust. I can imagine that the trust would rapidly disappear if China stopped purchasing US bonds and assets. If that were to happen, there's not much the US military could do to restore trust.
          • People also have trust in Swiss franks, perhaps even more than in the US dollar, and they have only a very small military.
      • by Nutria ( 679911 )

        So, the U.S. dollar is not fan-currency because it is backed by the full might of the U.S. military?

        A fan, or fanatic, sometimes also called aficionado or supporter, is a person who is enthusiastically devoted to something or somebody, such as a band, a sports team, a genre, a book, a movie or an entertainer.

        How in the hell do you equate backed by the full might of the U.S. military to fandom?

        • So, the U.S. dollar is not fan-currency because it is backed by the full might of the U.S. military?

          A fan, or fanatic, sometimes also called aficionado or supporter, is a person who is enthusiastically devoted to something or somebody, such as a band, a sports team, a genre, a book, a movie or an entertainer.

          How in the hell do you equate backed by the full might of the U.S. military to fandom?

          You missed a negation. Bitcoin is a fan based currency, OP expressed a distaste for fan based currency... I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government? That would sound more like fandom to me.

          • by Nutria ( 679911 )

            OP expressed a distaste for fan based currency...

            I am OP.

            I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government?

            You're making a syllogistic fallacy. Just as Socrates is a mortal, but not all mortals are Socrates, everyone who is enthusiastically devoted to something also has faith and trust in it, but not everyone who has faith and trust is also enthusiastically devoted to it.

          • I was asking why the U.S. dollar is not fan based, is it because of faith and trust in the government? That would sound more like fandom to me.

            Nobody really needs to be a fan of the US government to realize that a currency backed by the taxing authority of the country with the biggest economy and biggest military which is accepted in trade around the globe and a long record of stability is probably of practical value. Bitcoin on the other hand is thinly traded, volatile, digital only, and relies on technology of uncertain robustness. Those things matter a lot.

            The majority of pragmatists using bitcoin seem to be people engaged in activities that

    • We lived for centuries writing checks and they don't clear instantly either. Why is it essential that Bitcoin clear instantly?
      THe desgin of bitcoin anticipated this. Initially the profit for adding transactions to the block chain with bitcoin mining. But it was always expected that as the return on mining slowed that it would become fee based. The problem is the fees offered are not reaching the required levels for more miners to enter.

      • I have no idea how "checks" (from here on in this post refers to them as "cheques") were handled in US shops, but here in the UK you could not actually buy goods in a physical shop with a cheque unless it was also presented with a valid cheque guarantee card issued by your bank - the cheque could then be presented up to the value of the cheque guarantee card.

        The only time you would present a cheque without a guarantee card is when buying remotely, and then the shipper would wait until your cheque cleared be

        • by H_Fisher ( 808597 ) <hvfisher@hotmail. c o m> on Friday March 04, 2016 @12:26PM (#51637053)

          For most of my lifetime, if a U.S. retailer accepted checks, one of two things happened: You wrote your check and went on your way with your goods, and either the check cleared within a few days, or the check did not clear. If your check didn't clear due to insufficient funds, the merchant could go after you for the amount of the check plus a "returned check" service fee. If you wrote a "worthless check" intentionally, you could be charged with a crime.

          Major retailers had their own solutions. I remember Gold Circle (predecessor of the Target store chain) having a check approval counter where you had to get your checks OKed — presumably to make sure you weren't a habitual writer of bad checks. At smaller businesses, it wasn't uncommon to see photocopies of people's bad checks pinned to the wall behind the cash register, or a sign boldly telling staff (and customers) not to accept checks from the below-named people. (There was an episode of "Seinfeld" that involved this, IIRC.)

          After 9/11, using the delays caused by the attack as a stated reason, the government and banking system changed it so that now, at most major retailers, writing a check is handled as an electronic debit of your bank account. Many retailers don't even keep the paper check — they print transaction information on it and hand it right back. This caused a little consternation among people who used to "float" a check, writing it a day or two before the money actually made it to the bank and betting the check would arrive after their pay did.

          And that's your history lesson. Hope it was worth the read. :-)

      • by bws111 ( 1216812 ) on Friday March 04, 2016 @10:56AM (#51636425)

        I don't recall ever having a check accepted where I didn't have to show ID. Furthermore, unless it was forgery, the check itself identifies who wrote it, and who is responsble for the debt. None of that is true with bitcoin. In fact, that seems to be the main selling point of bitcoin.

      • by bill_mcgonigle ( 4333 ) * on Friday March 04, 2016 @10:59AM (#51636437) Homepage Journal

        Credit cards take a while to clear too - - chargebacks can be up to 6 months later. There's absolutely no guarantee that you will actually have the money until that six month period is past. Bitcoin actually improves the situation tremendously. The odds of a bitcoin double-spend are significantly lower than the odds of a credit card chargeback. Especially within wallet systems - say Mycelium to Mycelium - nobody in the peer-to-peer economy is worried at all about getting their money. It's something the established bankers make up to create fear.

      • Never mind all the other issues, of which there are many, but BTC has to compete with the credit card networks. They work effectively instantly. People are not interested in stepping backwards.

  • "Classic"? (Score:5, Insightful)

    by H_Fisher ( 808597 ) <hvfisher@hotmail. c o m> on Friday March 04, 2016 @09:22AM (#51635905)

    I don't know if there's more backstory, but perhaps users have been slow to adopt because "Classic" sounds like what you'd call an older and (in the usual context) more limited option?

    If I'm developing a new technology with potentially millions of $USD riding on its availability and adoption, I'm not going to call it "Classic." "NextGen," or "Enhanced," or even "CC" for Corrected Chain? This sounds less like the free market and more like terrible marketing.

  • Wouldn't it be easier to dig up a sunken ship with Golden Doubloons and use this as the accepted currency. Frankly I'd rather be a pirate that sails the seas, than one that pirates movies and music.
  • by NotDrWho ( 3543773 ) on Friday March 04, 2016 @09:42AM (#51635987)

    With that much internal bickering sabotaging the whole project, it MUST be OSS.

  • Crypto Trojans? (Score:3, Interesting)

    by 4im ( 181450 ) on Friday March 04, 2016 @09:47AM (#51636007)

    As an AC over on SoylentNews already asked - is there a significant amount of Bitcoin transactions due to ransom payments for crypto-locked data?

    I seriously wonder, as there's apparently been quite a surge of corresponding infections lately, and it also seems that quite some victims actually pay up.

    • Re: (Score:3, Informative)

      by Anonymous Coward

      That's one of the biggest items, along with other black market payments. Legal purchases, donations, etc, appear to make up only a tiny fraction. Paying $200 to get your files back is your only option if you didn't keep backups, and they make it really easy and streamlined these days. There was even an article a while back about how they actually have customer service departments that are very helpful.

      It's sort of like how bittorrent has plenty of legitimate uses we can point to, but at the end of the da

  • Yawn (Score:5, Informative)

    by Orgasmatron ( 8103 ) on Friday March 04, 2016 @10:21AM (#51636195)

    Pay higher fees if you are in a hurry.

    The demand for most goods tends towards infinity as the cost drops. Bitcoin transactions have been fantastically cheap, which everyone sensible knew couldn't possibly last.

    So, do we make bigger blocks, or increase fees? Miners should get more fees from either option. Users would prefer bigger blocks, since it keeps their costs artificially low.

    But the real problem is the relay node shortage. Running a node is no longer trivial, and there is no mechanism to recover costs. The blockchain is around 80 GB now (including the index), and growing by ~100 MB per day. Larger blocks will only make that worse, and will almost certainly knock yet more nodes offline.

    Someone made a distro that ran bitcoin entirely out of tmpfs. I once had a bunch of super-fast nodes using it. When the blockchain finally exceeded my ability to add more RAM to those boxes, the average time for a new node on the network to sync up increased by a factor of 3 or so.

    That's just my personal example. Hundreds of other nodes have dropped off for their own reasons.

    • by swb ( 14022 )

      It almost sounds like Bitcoin is starting to suffer from the same capacity problems that hit USENET. I remember a point where running a server just became such a major resource hog that lots of places just quit or could only carry a subset of the hierarchy.

      What's odd is that 80 GB doesn't seem like a staggering amount of data, especially in an era of superfast SSD storage (like NVMe) where the memory/disk penalty is a lot smaller. It doesn't even seem like a lot of RAM, either, unless you think in terms o

      • They were indeed dirt cheap consumer motherboards. Carefully selected to support relatively large memory (for the category, at the time).

        For what I was doing, it wasn't about the size, it was about the seeks. Bootstrapping a new node is murder on a spinning disk. It is, or at least was, incredibly unfriendly to cache schemes because you keep skipping backwards by 1000 blocks to get to the root.

        Also, SSD is fast, but it isn't as fast as you are thinking, particularly when every single read is a cache miss

    • Re:Yawn (Score:5, Insightful)

      by OverlordQ ( 264228 ) on Friday March 04, 2016 @11:28AM (#51636633) Journal

      > The blockchain is around 80 GB now (including the index), and growing by ~100 MB per day. Larger blocks will only make that worse, and will almost certainly knock yet more nodes offline.

      0.12.0 has pruning that drops the disk requirements back down to less than 10 gigs.

    • Well if Bitcoin is going to get expensive to use... then why would merchants (or customers) have any reason to like it over credit cards? Credit cards settle in seconds, and the network has scaled to massive size and can continue to scale no problem. The alleged advantages of Bitcoin that people liked to bandy about were that it was supposed to be really fast and not cost a bunch like credit cards do. If you can't deliver that (and it can't, it cannot scale to the levels it would need to) then there's littl

      • This reminds of the day I went into the university book store to get a required book for a class. Apparently, they didn't print enough and it was sold out. The clerk told me "you should have come earlier", apparently not realizing that somebody else wouldn't have a book then.
  • by CanadianMacFan ( 1900244 ) on Friday March 04, 2016 @12:07PM (#51636935)

    I'm gong back to tulips!

  • Bullshit (Score:3, Insightful)

    by sexconker ( 1179573 ) on Friday March 04, 2016 @01:22PM (#51637513)

    This problem is self-correcting.

    If there's a drop in the computational power of the network such that blocks are mined less frequently, then the difficulty drops and blocks are mined more frequently.

    If people are complaining (again) about not being able to fit a ton of tiny transactions into a block without paying a fee to ensure prompt delivery, then I'll say (again):

    1: Pay a transaction fee
    2: Stop shitting around a bunch of tiny transactions
    3: Help out and be a miner yourself
    4: This is all by design - the end game scenario for BTC is that mining rewards end and all incentive is from transaction fees

    If this continues and people don't recognize 1-4 above, idiots will stop using Bitcoin for a bunch of tiny transactions and the problem will correct itself. You don't need to pay .000000001 BTC every time you visit a page on a BTC funded site. You need to pay 000001 BTC to get a credit of 1000 page visits. Bitcoin isn't for massive amounts of microtransactions any more than a traditional bank is. If you want it to do that, then pay the fee (which could be a significant percentage of your microtransaction).

    • Why is this insightful? Getting rid of small transactions only gets you so far. The hard limit of transactions in somewhere around three per second (or at least that order of magnitude). Getting rid of micro-transactions only buys a small amount of time, until transaction volume grows to where even macro-transactions are occurring at more than 3 per second, or at least trying to occur at more than 3 per second.

      Think about it this way. This is a global currency that can't do more than 95 million transact

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